[00:00:10] Speaker 02:
Good morning.

[00:00:11] Speaker 03:
Good morning, Your Honors.

[00:00:12] Speaker 03:
David Jacobs, Debs Dean Becker-Green on behalf of Appellant Dean Decker.

[00:00:17] Speaker 03:
I would like to reserve four minutes for rebuttal.

[00:00:20] Speaker 02:
I'm sorry, four minutes?

[00:00:21] Speaker 02:
Four minutes for rebuttal.

[00:00:22] Speaker 03:
Thank you.

[00:00:24] Speaker 03:
Go ahead.

[00:00:29] Speaker 03:
So the question before us is, will the courts permit an award

[00:00:37] Speaker 03:
in clear violation of longstanding public policy of the state of California.

[00:00:43] Speaker 03:
The award before us awards a penalty for Mr. Decker's temerity to compete with Jeffries.

[00:00:55] Speaker 01:
What if there weren't a penalty?

[00:00:58] Speaker 01:
liquidated damages clause, but they were just suing for damages for his breach of contract for not coming to work when he said he would.

[00:01:08] Speaker 01:
You have the same problem?

[00:01:09] Speaker 03:
Don't have the same problem, Your Honor, because we don't.

[00:01:13] Speaker 03:
As a matter of fact, the case was bifurcated.

[00:01:15] Speaker 01:
I'm sorry.

[00:01:16] Speaker 03:
Because there was a liquidated damages provision.

[00:01:20] Speaker 03:
And in case the arbitrators, as they did in several other cases,

[00:01:25] Speaker 03:
found liquidated damages provision violated California law, the other remedy was you can sue for actual damages if you prove actual damages.

[00:01:34] Speaker 01:
Then it's really very mysterious to me.

[00:01:36] Speaker 01:
I mean, if you could have actual damages, and this is liquidated damages, which has a public policy of California as well to permit a liquidated damages clause.

[00:01:45] Speaker 01:
Excuse me.

[00:01:45] Speaker 03:
I'm sorry.

[00:01:48] Speaker 01:
And if this is a reasonable liquidated damages clause, then I don't understand your argument at all.

[00:01:56] Speaker 03:
Fair question, Your Honor.

[00:01:58] Speaker 01:
I know it's a fair question.

[00:01:59] Speaker 01:
That's why I asked.

[00:02:02] Speaker 03:
So the liquidated damages clause we have in issue in this case is not really a liquidated damages clause.

[00:02:12] Speaker 03:
It only comes into effect in the penalty only

[00:02:18] Speaker 03:
exists if Mr. Decker competes with Jeffries.

[00:02:23] Speaker 03:
That's not a liquidated damages clause.

[00:02:26] Speaker 03:
That's a non-compete clause.

[00:02:28] Speaker 01:
Now, if... I understand that.

[00:02:29] Speaker 01:
I was asking my question on the premise that the same standard apply.

[00:02:34] Speaker 01:
That is that it didn't have a liquidated damages provision, but the breach was only if he did x and y.

[00:02:44] Speaker 03:
Well, if he didn't show up because he went into government, for example.

[00:02:48] Speaker 01:
No, but suppose he didn't show up.

[00:02:49] Speaker 01:
Suppose the contract was exactly as it is, except it didn't have the liquidated damages provision.

[00:02:58] Speaker 01:
It was just a contract.

[00:02:59] Speaker 01:
So if he stayed with Credit Suisse, there was a breach of contract.

[00:03:03] Speaker 01:
If he went somewhere else, there wasn't a breach of contract.

[00:03:06] Speaker 03:
Well, if he stayed with Credit Suisse,

[00:03:16] Speaker 03:
They couldn't, there would be, that would be a penalty for staying at Credit Suisse and competing.

[00:03:24] Speaker 01:
Now, if they could show... No, it would be true even if there wasn't a liquidated damages provision.

[00:03:29] Speaker 03:
I'm sorry, Your Honor.

[00:03:30] Speaker 01:
So even if there was no liquidated damages provision.

[00:03:33] Speaker 03:
That is true.

[00:03:33] Speaker 03:
If there's a penalty for staying at Credit Suisse.

[00:03:36] Speaker 01:
And you breach the contract and we want damages.

[00:03:38] Speaker 03:
Then you can't have a penalty for staying or competing, period, whether it's called liquidated damages or anything else.

[00:03:45] Speaker 03:
Now.

[00:03:45] Speaker 02:
I want to return to sort of the arbitration itself.

[00:03:50] Speaker 02:
Did you request a reasoned decision at the arbitration stage?

[00:03:53] Speaker 03:
Neither party requested a reasoned decision.

[00:03:55] Speaker 02:
Then without a written decision, how do we know what the arbitration panel reason was such that we can determine that they ignored the law?

[00:04:04] Speaker 02:
Two answers to that, Your Honor.

[00:04:06] Speaker 03:
One, we are under the public policy exception.

[00:04:11] Speaker 03:
You don't need to know the reasons of the arbitrators.

[00:04:15] Speaker 03:
If the award itself is in violation of public policy, long-established public policy, that is enough.

[00:04:23] Speaker 03:
Because a court, federal court, will not enforce an award that is in violation of public policy.

[00:04:33] Speaker 03:
For obvious reasons, the court doesn't want to give its imprimatur to an award that violates the law.

[00:04:40] Speaker 03:
So on public policy, that's not a consideration.

[00:04:45] Speaker 03:
Manifest disregard, it's a different question.

[00:04:49] Speaker 03:
Manifest disregard, there are certain legally dispositive facts that this case has.

[00:05:00] Speaker 03:
And I'll tell you what they are.

[00:05:03] Speaker 03:
The agreement was covered by California law.

[00:05:06] Speaker 03:
The agreement is an employment agreement.

[00:05:08] Speaker 03:
The agreement refers to Jeffrey's handbook for definition of competitive activity.

[00:05:13] Speaker 03:
The liquidated damages clause operates only if Mr. Decker does not report to work for Jeffrey's because he stays at Credit Suisse.

[00:05:19] Speaker 01:
But it's not covering a post-employment period when he has no obligations to the employer anymore.

[00:05:26] Speaker 01:
And all of the cases, am I wrong to say that

[00:05:29] Speaker 01:
Basically, all of the cases which apply the stringent rule deal with somebody who is being required after he has no obligation to the employer not to compete.

[00:05:44] Speaker 01:
And this is not the situation here.

[00:05:46] Speaker 01:
He had an obligation to the employer here.

[00:05:48] Speaker 01:
Even though he wasn't employed, the obligation was to show up at a certain time and work.

[00:05:54] Speaker 01:
So it was a reciprocal agreement at that point.

[00:05:56] Speaker 01:
Nobody was trying to bind him.

[00:05:58] Speaker 01:
after he was no longer obligated to the employer.

[00:06:04] Speaker 03:
Understood, Your Honor.

[00:06:05] Speaker 03:
Two responses to that.

[00:06:08] Speaker 03:
One is that there is no law that restricts restrictive covenants, or 16600, to post-employment

[00:06:19] Speaker 03:
That is the typical scenario.

[00:06:21] Speaker 01:
In order to be a public policy, it has to be an absolutely clear, well-established, invariable rule.

[00:06:31] Speaker 01:
We don't have that here, because we have no case like this, as far as I know, in which there wasn't a commitment to go to work for someone.

[00:06:41] Speaker 01:
What if he was actually working there?

[00:06:43] Speaker 01:
Could you have such a rule?

[00:06:44] Speaker 03:
I'm sorry, Your Honor?

[00:06:45] Speaker 01:
What if he had already begun working there?

[00:06:46] Speaker 01:
Could they have such a rule?

[00:06:48] Speaker 01:
That is, you can't, on the side, be doing stuff for credit squeeze?

[00:06:52] Speaker 03:
They could have a rule that he could not have another job if he was employed with them, yes.

[00:06:57] Speaker 01:
Right.

[00:06:58] Speaker 01:
OK.

[00:06:58] Speaker 01:
That's different.

[00:06:58] Speaker 01:
So essentially, that's what this was.

[00:07:01] Speaker 01:
You made a commitment.

[00:07:03] Speaker 01:
We're not paying you yet, but we have a commitment to pay you.

[00:07:05] Speaker 01:
In fact, we're going to have to pay you if we don't employ you.

[00:07:08] Speaker 01:
It was completely reciprocal, and it was—so at a minimum, it's different from anything in any of the case law.

[00:07:16] Speaker 01:
Is that right?

[00:07:17] Speaker 03:
Your Honor, yes.

[00:07:19] Speaker 03:
There are no pre-employment cases that talk about 1660.

[00:07:23] Speaker 01:
So how can that be a well-established, et cetera, et cetera, public policy?

[00:07:27] Speaker 03:
It is a well-established public policy.

[00:07:29] Speaker 03:
Indeed, it's such a well-established public policy.

[00:07:32] Speaker 03:
It goes back 150 years that you cannot penalize somebody for competing, whether it's pre-employment or post-employment.

[00:07:41] Speaker 03:
You don't need a case that says, oh, yeah, this is a

[00:07:49] Speaker 03:
This is a hard and fast rule that we will not countenance.

[00:07:53] Speaker 01:
Not just pre-employment.

[00:07:54] Speaker 01:
This is pre-employment with an obligation that if they don't, in fact, employ him, they're going to pay him $10 million.

[00:08:00] Speaker 01:
Isn't that right?

[00:08:02] Speaker 01:
If they had backed out, they would have owed him $10 million.

[00:08:05] Speaker 03:
Right.

[00:08:06] Speaker 03:
That is a consideration that is not relevant in a case

[00:08:11] Speaker 01:
where 16600 is— So essentially, they were paying him because they had— I mean, they had an irrevocable agreement that starting on a certain day, they were going to pay him a goodly amount of money, and if they didn't do it, they owed him $10 million.

[00:08:25] Speaker 01:
That sounds pretty close to an employment— a current employment deal.

[00:08:30] Speaker 03:
Well, the rule— the 16600 rule in the employment context is a per se rule.

[00:08:37] Speaker 03:
Any penalty on competition is per se invalid.

[00:08:42] Speaker 03:
It doesn't matter when it occurs.

[00:08:44] Speaker 01:
Not while you're working.

[00:08:45] Speaker 01:
You already said that.

[00:08:46] Speaker 03:
That's true.

[00:08:47] Speaker 03:
It's not while you're working.

[00:08:48] Speaker 03:
But if it's pre-employment or post-employment, it's a per se rule.

[00:08:53] Speaker 03:
If it's a per se rule, there's no balancing test because there's a balancing test.

[00:08:57] Speaker 01:
There is no pre-employment case, you told me.

[00:09:02] Speaker 03:
I can't point you to a case that applies except this one.

[00:09:05] Speaker 01:
And you keep saying it's pre-employment or post-employment, but there is no pre-employment case.

[00:09:11] Speaker 03:
It shouldn't make a difference in a per se rule, because you could have all manner of contracts.

[00:09:19] Speaker 03:
Look at the mischief that would cause.

[00:09:23] Speaker 03:
For example, Mr. Decker, while you're

[00:09:30] Speaker 03:
In your interim period, you may not interview anyone over 40 for hiring at Jeffries when you join.

[00:09:38] Speaker 03:
You can't do it.

[00:09:39] Speaker 03:
You may not do that.

[00:09:40] Speaker 03:
And you know what?

[00:09:41] Speaker 03:
We won't hire anybody over 40 either.

[00:09:44] Speaker 03:
Does anybody think that award would be sustainable?

[00:09:49] Speaker 03:
No, because it's illegal, just like this is.

[00:09:52] Speaker 03:
It doesn't matter whether it's pre-employment or post-employment.

[00:09:58] Speaker 03:
When the cases are legion

[00:10:00] Speaker 03:
legion that in 16600 in the employment context is a per se rule.

[00:10:10] Speaker 03:
Any penalty attached to competition is unlawful.

[00:10:17] Speaker 03:
It doesn't matter when it occurs.

[00:10:19] Speaker 01:
Besides which we have this problem that Judge Mendoza pointed to, which we have no idea why the

[00:10:24] Speaker 01:
arbitrators ruled as they did.

[00:10:27] Speaker 01:
They could have ruled as they did for completely different reasons.

[00:10:31] Speaker 01:
We don't know what they are.

[00:10:32] Speaker 03:
Well, again, Your Honor's talking about manifest disregard.

[00:10:36] Speaker 03:
But there are, as I was going through them, there are legally dispositive facts here which the arbitrators.

[00:10:43] Speaker 01:
No, I actually wasn't talking about manifest disregard.

[00:10:46] Speaker 01:
I've referred to public policy as well for the same reasons.

[00:10:49] Speaker 01:
We don't know what they ruled.

[00:10:51] Speaker 03:
We don't need to know why they ruled the way they did on public policy, Your Honor.

[00:10:56] Speaker 03:
All we need to know is there is an award that penalizes Mr. Decker for having competed.

[00:11:03] Speaker 03:
That's illegal.

[00:11:04] Speaker 03:
That's in violation of California public policy.

[00:11:07] Speaker 03:
We don't need to know why.

[00:11:08] Speaker 03:
It doesn't matter why under the law.

[00:11:11] Speaker 02:
Chancellor, you have four minutes left.

[00:11:12] Speaker 02:
Did you want to reserve that?

[00:11:15] Speaker 03:
I did.

[00:11:17] Speaker ?:
OK.

[00:11:17] Speaker ?:
Thank you.

[00:11:29] Speaker 02:
Good morning.

[00:11:29] Speaker 00:
Good morning.

[00:11:30] Speaker 00:
May it please the court, Andrew Chaperon on behalf of the Appellee, Jeffries LLC.

[00:11:36] Speaker 00:
Jeffries' motion to confirm the award in this case and Mr. Decker's motion to vacate were both explicitly filed under the Federal Arbitration Act and not under any other authority.

[00:11:47] Speaker 00:
Accordingly, Decker cannot rely on any ground for vacator other than those specifically set forth in Section 10A4 of the Federal Arbitration Act.

[00:11:57] Speaker 01:
And what is the one that's specifically set forth?

[00:11:59] Speaker 01:
It's not that specific.

[00:12:01] Speaker 01:
What does it actually say?

[00:12:03] Speaker 00:
So 10A4 would be that the arbitrators exceeded their powers.

[00:12:07] Speaker 00:
Right.

[00:12:07] Speaker 00:
And it's under that one where this court has recognized manifest disregard for the law falls under that specific section, 10A4.

[00:12:16] Speaker 00:
And before the district court, Mr. Decker's lead argument was under manifest disregard for the law.

[00:12:23] Speaker 00:
While this circuit has recognized that ground, it's also set forth some very specific and very stringent standards that a party must satisfy in order to establish that an award should be vacated.

[00:12:35] Speaker 02:
I guess I just, I don't understand why they wouldn't have asked for a recent decision.

[00:12:39] Speaker 02:
I don't understand that.

[00:12:43] Speaker 02:
It's different.

[00:12:46] Speaker 02:
Was it the money thing?

[00:12:47] Speaker 02:
But we're talking about a lot of money here.

[00:12:49] Speaker 02:
Why not get a reasoned decision?

[00:12:52] Speaker 00:
On behalf of Jeffries, I can just tell you we rarely do, if ever.

[00:13:04] Speaker 00:
And as you point out,

[00:13:05] Speaker 00:
The Ninth Circuit makes it very clear that in the absence of a reasoned decision, it's all but impossible to establish manifest disregard.

[00:13:13] Speaker 00:
So now on appeal, Mr. Decker has flipped the script.

[00:13:16] Speaker 01:
There were two other rulings around the same time and similar people, and those were reasoned decisions.

[00:13:28] Speaker 00:
Were they?

[00:13:28] Speaker 00:
No.

[00:13:29] Speaker 01:
They just came out the other way.

[00:13:32] Speaker 00:
Well, the one did say,

[00:13:34] Speaker 00:
we find this clause is invalid under 16600.

[00:13:38] Speaker 00:
And that's all it said.

[00:13:40] Speaker 00:
The other one said nothing.

[00:13:45] Speaker 00:
Now on appeal, though, we flip the script.

[00:13:48] Speaker 00:
And I think Mr. Decker realizes he can't establish manifest disregard for the law.

[00:13:54] Speaker 00:
He relies on public policy.

[00:13:56] Speaker 00:
But it's really just a repackaging of the manifest disregard argument.

[00:14:01] Speaker 00:
With the difference being that Mr. Decker believes, if you say public policy, you can disregard the stringent standards that this circuit has set forth for review of an arbitration award under the FAA.

[00:14:16] Speaker 00:
And in fact, Mr. Decker has gone so far in his reply brief to say, as long as someone claims there's a violation of public policy, this court should review the arbitrator's award de novo.

[00:14:27] Speaker 02:
What about his argument that this is all very clear public policy that this is in violation of?

[00:14:33] Speaker 00:
Yeah, I would say that it's not.

[00:14:36] Speaker 00:
Section 16600 is hotly litigated in courts throughout California all the time, as I think is evidenced in the briefs.

[00:14:44] Speaker 00:
And very, very importantly, every single case relied upon by Decker in the arbitration dealt with post-employment restrictions on employees.

[00:14:53] Speaker 02:
Are there any case of pre-employment litigation?

[00:14:55] Speaker 00:
There are none.

[00:14:56] Speaker 02:
Or cases, rather.

[00:14:57] Speaker 02:
There are none.

[00:14:58] Speaker 00:
And we argued extensively to the panel, similar to what Judge Barzom was alluding to, that if this case is more like anything, it's more like a term employment agreement, which are valid in California, even though they restricted employees' right to leave and go work somewhere else.

[00:15:18] Speaker 00:
So there's nothing on point.

[00:15:21] Speaker 01:
But this is far more... In a term, employment agreement, there are cases that say that if you've promised to work for three years and you leave after a year and a half, and it also says, and you can't go work, you can't work during that three years for a competitor, the competitor requirement continues to apply even if you're no longer working for them.

[00:15:46] Speaker 01:
Correct.

[00:15:46] Speaker 01:
Is that basically what you're saying?

[00:15:49] Speaker 00:
Or there's a building consequence, often, which is if you leave before the end of the three years, you have to pay X. And if we fire you before the end of the three years, we have to pay you Y. But also with regard to the competition question, specifically.

[00:16:04] Speaker 01:
I mean, if you leave before the three years and go work for a competitor, you have to pay X. Correct.

[00:16:14] Speaker 00:
Now, I think what's really important here, too, is the Supreme Court of California's ruling in Xgel v. Biopharma, which really put, in our view, kind of an end to Mr. Decker's argument that the panel should take this post-employment restrictive covenant law and apply it pre-employment.

[00:16:40] Speaker 00:
This is in 2020.

[00:16:42] Speaker 00:
And the Extra Court is talking about the very cases relied upon by Mr. Decker, Edwards versus Arthur Anderson, Chamberlain, the same cases cited again and again in their brief.

[00:16:54] Speaker 00:
And the Supreme Court of California said, it is true that these decisions spoke in broad terms, suggesting that restraints on trade in all contexts

[00:17:04] Speaker 00:
or void per se, but it is axiomatic that an unnecessarily broad holding is informed and limited by the facts of the case in which it is articulated.

[00:17:15] Speaker 00:
The contracts at issue in these cases involved agreements not to compete upon terminating employment or selling a business, and we understand their holdings to be informed and limited by the factual context presented.

[00:17:30] Speaker 00:
So given the Supreme Court of California has told us all

[00:17:34] Speaker 00:
Don't read these cases for anything more than the facts of them.

[00:17:38] Speaker 00:
How can we fault this arbitration panel for not following the very same cases that Decker presented to them?

[00:17:46] Speaker 00:
If, in fact, the arbitrators decided, hey, this case is different.

[00:17:49] Speaker 00:
It's pre-employment.

[00:17:50] Speaker 00:
It's not the same as the cases relied upon by Decker.

[00:17:54] Speaker 00:
I don't think we can.

[00:17:55] Speaker 00:
And we certainly can't say there is a manifest disregard for the law or a violation of clearly applicable and dominant public policy.

[00:18:12] Speaker 01:
Certainly... Can you have something that violates public policy but is not in manifest disregard of the law?

[00:18:21] Speaker 00:
I have not seen a case in this circuit that says that.

[00:18:25] Speaker 01:
Or any other circuit, or any other Supreme Court, or anywhere else.

[00:18:28] Speaker 00:
Well, there is because, again, this public policy, in our view, well, I think it's pretty clear, it doesn't arise under the FAA.

[00:18:36] Speaker 00:
it arises out of these labor collective bargaining cases under the LMRA.

[00:18:41] Speaker 01:
But since the public policy has to be well-defined and dominant and explicit, if it's not in manifest disregard of the law, how could it be a violation of public policy?

[00:18:52] Speaker 01:
Could it be a violation of public policy?

[00:18:55] Speaker 00:
I don't think so.

[00:18:56] Speaker 00:
And the courts in this circuit that have looked at it have always aligned the two, similar to the way the district court did here, to say, look,

[00:19:05] Speaker 00:
Because there is no law right on point here that we can say that the panel or the arbitrators ignored, we can't say that you've satisfied the public policy test.

[00:19:16] Speaker 00:
So I think they need to be aligned.

[00:19:19] Speaker 00:
In labor cases, there are cases where awards have been vacated on public policy.

[00:19:26] Speaker 00:
But it's typically when someone's being reinstated to work.

[00:19:30] Speaker 00:
For example, this is in our brief, a sexual harasser is being put back into the office with people he harassed.

[00:19:37] Speaker 00:
Or a pilot who flew a commercial airline intoxicated is being put back to work.

[00:19:44] Speaker 01:
But the other distinction there is that the relief in those instances

[00:19:50] Speaker 01:
First of all, there are also cases to the contrary, I believe, which say that you have to, it has to be against the law to put the person back to work, not just against the law to fire the person, but because it's the relief that has to be, has to violate positive law.

[00:20:12] Speaker 01:
And here the relief is just

[00:20:14] Speaker 01:
paying some money, basically.

[00:20:16] Speaker 00:
A gigantic Swiss bank is going to have to pay the money they voluntarily, the debt they voluntarily agreed to undertake when they made Mr. Decker.

[00:20:25] Speaker 01:
I mean, if instead what they were doing was ordering him to work for Credit Suisse, that would be a different story, but that's not what's going on here.

[00:20:38] Speaker ?:
Correct.

[00:20:38] Speaker 00:
Correct.

[00:20:38] Speaker 00:
I did want to briefly address, under manifest disregard for the law, because Mr. Decker

[00:20:45] Speaker 00:
cited it, the comedy club decision in which this court did find manifest disregard for the law, it's highly distinguishable.

[00:20:55] Speaker 00:
In that case, there was a reasoned decision.

[00:20:57] Speaker 00:
And in issuing a nationwide non-compete injunction, what the arbitrator did was take a case that was right on point regarding 16600 and said explicitly in his reasoning,

[00:21:16] Speaker 00:
that that case doesn't concern 16600, it only concerns antitrust laws.

[00:21:22] Speaker 01:
It only concerns what?

[00:21:24] Speaker 00:
Antitrust laws.

[00:21:26] Speaker 00:
And this court just couldn't square the two.

[00:21:28] Speaker 00:
I mean, if you read the case, it was called Dayton Timelock.

[00:21:31] Speaker 00:
It specifically addressed the type of contracts that issue in that case, which were business-to-business franchise-type agreements.

[00:21:39] Speaker 00:
And Dayton Timelock set forth very specific standards under 16600 for when and how those agreements were enforceable.

[00:21:47] Speaker 00:
This court just couldn't square that the arbitrator said that case didn't concern 16600 when by its expressed words, it did.

[00:21:56] Speaker 00:
We have nothing like that here.

[00:21:58] Speaker 00:
Again, we don't know why the arbitrators made the decision they did.

[00:22:02] Speaker 00:
They just said it was based on the specific facts of this case, which are, frankly, quite unique.

[00:22:08] Speaker 00:
But what we do know is that none of the cases relied upon by Mr. Decker were right on point, as I've talked about before.

[00:22:17] Speaker 00:
They're very different, and the Supreme Court of California has told us not to read them any broader than the facts of those cases allow.

[00:22:34] Speaker 00:
One final note is,

[00:22:37] Speaker 00:
Based on our research, this court has never vacated an arbitration award in an FAA case on the grounds of public policy.

[00:22:48] Speaker 00:
And we just certainly suggest that the facts of this case certainly do not present the opportunity to be the first of its kind.

[00:22:59] Speaker 02:
Any other questions?

[00:23:02] Speaker 02:
All right, thank you.

[00:23:02] Speaker 02:
Thank you.

[00:23:10] Speaker 03:
If I may, I'd like to go back to the public policy of the state of California and the notion that pre-employment is somehow different from post-employment.

[00:23:21] Speaker 03:
California has one of the strongest, most fundamental public policies in the state favoring open competition and employee mobility.

[00:23:30] Speaker 03:
To say, Playhut says that, indeed, the legislature in amending 16600, admittedly, after the facts of this case,

[00:23:41] Speaker 03:
making 1,600 stronger, said, we're not changing the public policy.

[00:23:47] Speaker 03:
We're merely restating the public policy that employee mobility is fundamental in the state of California.

[00:23:56] Speaker 03:
To show how fundamental employee mobility is in this state, employee mobility has been part of the public policy of this state for over 150 years.

[00:24:08] Speaker 03:
It predates discrimination statutes.

[00:24:11] Speaker 03:
That's how long employee mobility, including 1600, pre-employment or post-employment, has been the public policy of the state.

[00:24:21] Speaker 03:
To carve out a niche and say, well, in this unique instance, because it was before Mr. Decker started, 1600 doesn't apply, or 150 years doesn't apply?

[00:24:33] Speaker 01:
You also contend that this was a manifest disregard case.

[00:24:37] Speaker 01:
But if it wasn't, let's assume it wasn't because there was no

[00:24:41] Speaker 01:
specific law as to a contract like this.

[00:24:45] Speaker 01:
And then how can something be against public policy but not manifest disregard when in order to be against public policy it has to conflict with a well-established explicit positive law rule?

[00:25:06] Speaker 01:
It seems like the two collapse into each other very much.

[00:25:10] Speaker 03:
For manifest disregard, the law has to be well-defined, explicit, and clearly applicable.

[00:25:15] Speaker 01:
And the language of our public policy is pretty much the same.

[00:25:18] Speaker 03:
It is.

[00:25:19] Speaker 01:
So what's the difference?

[00:25:22] Speaker 01:
How could it be not manifest disregard, but against public policy?

[00:25:27] Speaker 03:
The difference is the court looks to the public policy, the strong public policy, and then looks in a public policy case

[00:25:40] Speaker 03:
and then looks to the award.

[00:25:43] Speaker 03:
And does the award violate the public policy?

[00:25:48] Speaker 03:
This award does.

[00:25:49] Speaker 03:
It forces Mr. Deckard.

[00:25:52] Speaker 01:
But it's not in manifest disregard of the law?

[00:25:55] Speaker 03:
I think it's also manifest disregard of the law.

[00:25:57] Speaker 01:
But let's suppose we thought it wasn't in manifest disregard of the law.

[00:26:00] Speaker 01:
Could it then violate public policy?

[00:26:02] Speaker 03:
I'm sorry, Your Honor.

[00:26:04] Speaker 01:
Suppose it wasn't in manifest disregard of the law, we thought.

[00:26:08] Speaker 01:
Could it then violate public policy?

[00:26:10] Speaker 03:
It could.

[00:26:11] Speaker 03:
It could.

[00:26:12] Speaker 01:
But I want to know how.

[00:26:14] Speaker 03:
Well, because the standards are different, you don't need to know the reasoning.

[00:26:18] Speaker 01:
But the standards aren't different.

[00:26:19] Speaker 01:
We just read them.

[00:26:20] Speaker 01:
They're pretty much the same.

[00:26:21] Speaker 01:
You agreed with that.

[00:26:23] Speaker 03:
I do.

[00:26:24] Speaker 03:
But the standards are different because you don't need to look into the reasoning of the arbitration panel on a public policy analysis.

[00:26:34] Speaker 03:
And I will say that public policy is a ground

[00:26:39] Speaker 03:
for vacature in the Ninth Circuit.

[00:26:43] Speaker 03:
We've had cases

[00:26:46] Speaker 01:
Can you point to one in which an arbitration award has been vacated?

[00:26:49] Speaker 03:
It's been vacated, but where public policy was argued and no one said, oh, gee, it's outside the FAA, you can't argue that.

[00:26:56] Speaker 03:
I mean, we have the- You can't argue it.

[00:26:58] Speaker 01:
I'm just saying it's not going to come out differently depending what you call it.

[00:27:01] Speaker 03:
Well, it didn't come out differently in those cases because there wasn't a long-term established public policy as there is in this case.

[00:27:12] Speaker 03:
I would like to say, because I'm almost out of time,

[00:27:15] Speaker 03:
Ixchel is a red herring.

[00:27:17] Speaker 03:
Ixchel is a business to business case.

[00:27:21] Speaker 03:
The Supreme Court of California said in Ixchel, in the employment context, we reinforce Edwards that any employment restriction on competition is per se, that's their words, not mine, per se invalid.

[00:27:40] Speaker 01:
We know that isn't true because it's not true with regard to a term of employment, right?

[00:27:48] Speaker 03:
Well, I'm telling you what the court said in Edwards, Your Honor.

[00:27:53] Speaker 03:
In the employment context,

[00:27:55] Speaker 01:
Right, they were referring to the Edward situation, but they weren't referring to a person with a contract of employment for a time period.

[00:28:05] Speaker 01:
They were referring to a period when the employee had no other obligation to the employer and vice versa.

[00:28:12] Speaker 03:
Your Honor, that is true, but it shouldn't make any difference.

[00:28:15] Speaker 03:
In this case, Mr. Decker was punished for having the temerity of having stayed at Credit Suisse.

[00:28:21] Speaker 02:
All right.

[00:28:21] Speaker 02:
Counsel, I think you are out of time.

[00:28:23] Speaker 02:
Any final questions?

[00:28:25] Speaker 02:
Thank you very much for your respective presentations.

[00:28:29] Speaker 02:
Thank you.

[00:28:30] Speaker 02:
And this matter of Jeffries v. Decker will stand submitted.